Final answer:
Using the given regression equation, we substitute the given values for X1, X2, and X3 to calculate the demand for natural gas, which comes out to approximately 589.7 units. This is closest to option c, which is 594 units. The regression equation provided does not factor in the change in the growth rate.
Step-by-step explanation:
The question involves calculating the demand for natural gas using a given regression equation. The provided equation is 1377 - 17.1(X1) - 3.7(X2) + 4.2(X3). To find the demand, we substitute the values of X1, X2, and X3 with 40, 37, and 8 respectively, and then account for the decrease in growth rate of the region.
To calculate:
- Plug in the values: 1377 - 17.1(40) - 3.7(37) + 4.2(8).
- Calculate the terms: 1377 - 684 - 136.9 + 33.6.
- Sum the results: 1377 - 684 - 136.9 + 33.6 = 589.7.
If the growth rate decreases by 2.5%, we would expect the demand to decrease accordingly. However, the regression equation provided does not include a term for the growth rate, so we cannot directly calculate its impact on demand. We only calculate the demand based on the values given, which is approximately 589.7 units, which we would round to the closest given option which is 594 units (option c).